Perth listings plunge as homes sell at record-breaking pace

The state’s peak real estate body reported that the number of properties available for sale in the state’s capital city fell to 5,885 in May — representing an 8.8 per cent decline from April and a staggering 29.3 per cent fall from figures recorded 12 months ago.

Cath Hart, the institute’s chief executive, highlighted that the last time listings were at such a low level was in mid-2010.

She highlighted strong demand — which has shown no signs of slowing down despite the impact of 11 rate hikes up to May — had led to listings in the city to dry up.

In fact, homes in the city are now selling at an unprecedented average rate of just 12 days.

“This is the fastest median time on market since we started keeping these records in 1998 and has only been recorded once before — in March 2021,” Ms Hart stated.

And while the Reserve Bank of Australia (RBA) handed down a “divisive” decision to further hike rates during its June meeting to an almost 12-year high of 4.10 per cent, the executive expressed her confidence that demand for properties in the city will “remain strong”.

She explained her optimistic outlook was grounded in several factors underpinning Perth’s property market. “WA’s population is growing, and people are choosing to buy established homes rather than tackle the rental market. Increasing costs and ongoing delays in the building industry are also seeing people buy rather than build.”

Ms Hart noted that sales have consistently outpaced the number of properties entering the market over the past two months, leading to a significant decline in the number of homes available for sale in the city.

“The number of sales each week has been 15 per cent higher than the number of weekly new listings since mid-April,” she stated.

For comparison, Ms Hart cited sales have typically been 15–30 per cent lower than new listings since 2010. “For sales to be this much higher than new listings is unusual and has only happened a few times in the past 13 years, and never for two months in a row.

“If this continues, we can expect the number of properties for sale to decline further,” she forecast.

Although the decline in the number of properties for sale may raise concerns about availability among potential buyers, Ms Hart reassured that new properties were still entering the market in “reasonable numbers”.

“We did see the number of new listings fall in April, but this was expected; people are generally thinking more about the various holidays during April than putting their home up for sale,” she said.

And while there was a rebound in listing numbers during May, Ms Hart said it is unlikely the figures will see significant increases in the next few months as it is a common trend for numbers to be lower during the winter season and traditionally rise during spring.

“The speed at which homes are selling is keeping the number of properties for sale low. I don’t think people need to worry about missing out, properties are still coming on to the market, it just takes patience and persistence,” she stated.

Houses continued to dominate buyer preference, as the number of available houses for sale dropped below 2,700 — a notable low point that had not been witnessed since April 2010.

Sales activity was greatest in the $500,000 to $1 million price bracket. Meanwhile, the $1 million-plus range remained fairly steady, but sales numbers declined in the under $500,000 bracket.

“While sales activity may have fallen in the lower price bracket, these figures suggest buyers are still looking for affordable homes and are acting quickly when they find them,” Ms Hart noted.

Data showed the fastest selling suburbs were Seville Grove (five days); Armadale, Brabham, Butler, Cooloongup, Greenfields, Hilbert and Port Kennedy (six days); and Padbury and Palmyra (seven days).

“With the exception of Padbury and Palmyra, these suburbs have median house prices below the Perth median, with Armadale the cheapest at $320,000,” Ms Hart said.

Perth’s property values are also holding up well, with CoreLogic’s home value index showing Perth’s dwelling values rose 1.3 per cent in May and 2.4 per cent over the past three months.

Ms Hart acknowledged major capital city markets’ growth rates have improved recently but pointed out Perth and Adelaide are the only two to show growth year on year and Perth is the only capital city where dwelling values have returned to record highs.

REIWA’s data showed the top-performing suburbs for house price growth in May were Hillarys (up 5.8 per cent to $1,100,000), Kinross (up 2 per cent to $632,500), Halls Head (up 1.9 per cent to $540,000), Secret Harbour (up 1.8 per cent to $539,500), and Melville (up 1.3 per cent to $1,002,500).

Other suburbs to record growth of over 1 per cent during the period were Parmelia, Seville Grove, Warnbro, Golden Bay, and Byford.

Perth’s rental market remained fiercely competitive for renters, with the city’s median dwelling rent price holding steady at $550 per week since April. However, the figures have increased by $20 or 3.8 per cent compared to three months ago, and by $80 or 17 per cent compared to May 2022.

For houses, the median weekly rent price fell from $575 in April to $565 in May, while the median weekly rent remained unchanged at $500 for units.

REIWA’s data showed the suburbs that saw the most growth in their median rent price in May were North Fremantle (up 40 per cent to $1,050 per week), Nedlands (up 39 per cent to $900), Shenton Park (up 30 per cent to $750), Applecross (up 25 per cent to $688), and Tuart Hill (up 24 per cent to $550).

In May, Ms Hart noted listings were slightly above 2,000 for a few weeks, but have dropped by the end of the month, leading to a 1.9 per cent decrease from April and a 13.8 per cent drop from May 2022.

“The rental market remains extremely tight and under current conditions, we expect to see rental listings hover around these levels for the rest of the year,” she said.

Rental properties are being snatched at a median of 15 days during May, one day faster than April, but one day slower than three months ago.

Data showed the suburbs recording the fastest median leasing times were Seville Grove, Cannington, Port Kennedy and Secret Harbour (nine days); Banskia Grove, Belmont and Carlisle (10 days); and Bayswater, Burswood, and Forrestfield (11 days).

Offering some positive outlook for tenants, she noted there is strong interest from Eastern States investors, particularly in areas priced below the median house price — which may provide additional supply for the supply-scarce market.

“Interestingly, some developers are also noting that Eastern States investors are buying blocks of land, however, if they plan to build, this will take some time to flow through to the rental market,” Ms Hart stated.

With legislative uncertainty being one of the reasons behind investors leaving the market in the past couple of years, Ms Hart noted the state’s announcement of a comprehensive set of changes to Western Australia’s rental laws had sparked renewed vigour among investors and landlords.

“Now, we finally have a direction on the reforms to the Residential Tenancies Act, investors and potential investors can move forward with more confidence,” she concluded.